1.     You deposit $5000 in the bank for one year. CASE 1: inflation = 0%, nom. interest rate = 20% CASE 2: inflation = 10%, nom. interest rate = 30% a.     In which case does the real value of your deposit grow the most?  Assume the tax rate is 15%.  b.     In which case do you pay the most taxes? c.     Compute the after-tax nominal interest rate, then subtract off inflation to get the after-tax real interest rate for both cases.

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